Margaret Zalewski

Start to prepare for your mortgage removal few months in advance Check your credit score. Use your credit cards and make your payments in full on time. Work on your monthly budget and cash flow based on your family income and expenses to see the impact on your household expenditures. Find a way to cut back on discretionary expenses, to see if you can make up some of that difference. Reduce payment shock and make a lump sum payment when renewing your mortgage or move to biweekly payments instead of monthly. Consider taking some funds from TFSA to pay down the mortgage. It is about comparing your current mortgage rate and interest rate on your investments. File your taxes up to date, last two years of your NOA will be required. Dont wait until you receive the renewal letter from your lender. If you dont act, the renewal of your mortgage term may be automatic. You dont have to renew your mortgage with the same lender. You can move your mortgage to another lender if their conditions better suit your needs. Contact mortgage broker early for multiply lender options and to get the best interest rate and conditions of your new mortgage. Sincerely, Margaret Zalewski

Start early to save money for down payment. The more time you must save and invest your money, the easier it will be to reach your savings goal. Stay focus to save 20% of downpayment to qualify for better interest mortgage rate. Build a credit history by getting a credit card and making all your payments on time. This is also a good strategy if you are new to Canada and looking to buy first house in the future. Open FHSA. Tax-free savings account it allows contributions up to $8,000 per year, for a lifetime contribution total up to $40,000 towards a qualifying home purchase. FHSA contributions you make are tax- deductible (like RRSP). Save money for HBP by contribution to an RRSP. With the HBP program individuals can borrow a maximum of $60,000 from an RRSP towards the first home purchase. If both spouses are eligible, they could combine the downpayment up to $120,000. The amount borrowed from RRSP is tax-free for the first-time home purchase as long as the repayment schedule is followed, and the loan is paid back into RRSP account within 15 years. Combining the Home Buyers Plan (HBP) and First Home Savings Account (FHSA) is a way to save tax-free for a down payment on your first home purchase. $60,000 from the HBP, and $40,000 from the FHSA, a person will be able to contribute $100,000. For a couple this gives them a combined total of $200,000 toward downpayment. but the amount could be higher if both FHSA accounts have benefited from capital growth. Hire a professional tax consultant to be sure you follow the rules to avoid unexpected tax consequences. Contact mortgage broker to search multiple lender options and get pre-approval for best mortgage rate. It is free and it helps you make an offer to purchase as soon as you find the dream home.

Dear Reader, New housing policies came into effect and leaving many Canadians unclear about how their finances have been affected. To lower the cost of downpayments, effective today, December 15, 2024, the federal government has increased the $1 million price cap for insured mortgages to $1.5 million. For example, a minimum downpayment on a $1.4 million home would now be up to $165,000 lower. This is helping more Canadians, especially younger generations, get those first keys of their own. To lower monthly mortgage payments by hundreds of dollars, the federal governments reform to make 30-year amortizations available to all first-time home buyers and to all buyers of new builds will also come into force today. This will reduce the cost of monthly mortgage payments so that more Canadians can afford a mortgage as they start their career and work their way up the salary ladder. December 15, 2024 - Ottawa, Ontario - Department of Finance Canada

With much of the early fall surge of supply having now been picked over, home sales activity recorded over Canadian MLS Systems dipped in December 2024. Sales were down 5.8% compared to November, but still stand 13% above where they were in May, just before the first interest rate cut by the Bank of Canada in early June. The fourth quarter of 2024 saw sales up 10% from the third quarter and stood among the stronger quarters for activity in the last 20 years, not accounting for the pandemic. The number of homes sold across Canada declined in December compared to a stronger October and November, although that was likely more of a supply story than a demand story, said Shaun Cathcart, CREAs Senior Economist. Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts. December Highlights: National home sales fell 5.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 19.2% above December 2023. The number of newly listed properties dipped 1.7% month-over-month. The MLS Home Price Index (HPI) climbed 0.3% month-over-month and was only down 0.2% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was up 2.5% on a year-over-year basis. https://www.crea.ca/media-hub/news/fourth-quarter-housing-data-hints-at-home-sales-rebound-for-2025/

Summary Home sales increased 2.8% between October and November, a fourth consecutive monthly gain that follows a 6.8% jump in October. On the supply side, new listings decreased by 0.5% compared to October, the second monthly decline in a row. Active listings remained stable from October to November. With the increase in sales, the number of months of inventory (active listings-to-sales) decreased for a fourth month in a row, moving from 3.8 in October to 3.7 in November. Market conditions tightened during the month and were tighter than their historical average in most provinces, while they remained roughly balanced in B.C. and Ontario. Housing starts increased 8% (+20.2K) in November to 262.4K (seasonally adjusted and annualized), beating the median economist forecast which called for a 245.1K print. Octobers figure was also revised up slightly by 1.4K to 242.2K. The monthly increase was driven by a rise in urban starts (+20.6K to 245K), which was mainly supported by an 11% increase in the multi-unit segment (to 195.3K). Meanwhile, single-detached urban starts increased 1.8K to 49.8K. Starts were down in Toronto (-2.7K to 26.7K) and Calgary (-1.5K to 30.1K), but up in Montreal (+14.9K to 31.3K) and Vancouver (+1.6K to 32.0K) during November. At the provincial level, the most notable increased were registered in Nova Scotia (+1.4K to 5.6K), New Brunswick (+1.4K to 6.1K), Quebec (+10.7K to 53.3K), and British Columbia (+8.1K to 48.6K). On the other hand, declines were seen in P.E.I (-88% on the month, or -1.1K to 158), Manitoba (-1.2K to 7.1K), and Ontario (-5.3K to 59.4K). The TeranetNational Bank Composite National House Price Index by 0.6% from October to November after adjustment for seasonal effects. Ten of the 11 markets in the composite index were up during the month: Quebec City (+2.2%), Halifax (+1.7%), Hamilton (+1.5%), Montreal (+1.3%), Vancouver (+1.2%), Victoria (+0.9%), Winnipeg (+0.9%), Ottawa-Gatineau (+0.4%), Calgary (+0.3%) and Toronto (+0.1%). Conversely, there was a decline in Edmonton (-0.8%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

Highlights Rental market conditions across Canadas large urban centres remained tight despite lessening market pressures in some centres due to record level growth in supply outpacing strong demand. The average vacancy rate for purpose-built rental apartments1 rose to 2.2% in 2024 from 1.5% in 2023, remaining below the 10-year historical average of 2.7%. Average rent growth slowed, with rents for 2-bedroom units rising by 5.4%2, down from the record 8.0% in 2023. Rents increased by 23.5% when units turned over, which is close to 2023 rates. Rent hikes on turnover units accounted for more than 40% of the overall rent increase. Despite the slowdown in rent growth, renter affordability remained strained. The increase in rental stock was driven by newly completed, higher-priced units, which were unaffordable for many renters and primarily served higher-income households. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres

From Scotiabank All Canadian provinces are poised for better growth in 2025, despite anticipating stronger policy headwinds in late 2025 and 2026 from both domestic and international fronts. Consumption is expected to accelerate over the next few quarters, driven by the Bank of Canadas rate cuts, which will alleviate household financial pressures, further supported by excess savings and fiscal stimulus. Residential investment is set to surge, fueled by lower financing costs and robust demand in an under-supplied market, driving economic expansion as we enter the new year. The rebound in interest rate-sensitive sectors, while beneficial for all provinces, is particularly promising for Ontario and British Columbia (B.C.), which have experienced notable contractions in housing activities. Policy uncertainty from the new U.S. administration poses a significant risk. Despite the lack of clarity on the path ahead, we have made some attempt to incorporate potential policy changes in our current forecast. Household spending is set to accelerate in 2025, driven by the Bank of Canadas rate cuts, elevated savings, and fiscal stimulus. Consumption held up solidly over the course of this year and has shown signs of picking up in the third quarter, surpassing expectations. Posting strong headline gains in the second half of this year, retail sales data highlights exceptional strength in the Atlantic provinces, although B.C. and Ontario experienced some soft patches. Despite the continued drag from ongoing mortgage resets, households should be able to manage higher mortgage payments by adapting saving and spending habits. As interest rates decline, this impact will also ease, paving the way for increased consumption. We anticipate a broad-based surge in household spending, fueled by stimulus cheques from Ontario and eventually B.C., as well as the federal government, GST/HST cuts, and mortgage rule changes as we move into 2025. This combination of factors sets the stage for a rebound in growth, with consumer confidence and spending power on the rise. Strong labour market conditions support consumption growth. After a period of cooling since the latter half of last year, employment growth stabilized and remained steady throughout 2024. However, employment gains have consistently lagged behind the rapid expansion of the labour force, driving up unemployment rates nationwide. This cooling trend is particularly evident in Quebec and Ontario, where employment growth slowed sharply, though recent signs of stabilization and recovery have begun to emerge. In Alberta, job gains have shown signs of weakening despite rapid population growth, following strong outperformance up until early this year. The Atlantic provinces have bucked the trend, with robust job gains outpacing strong labour force growth, indicating remarkable economic momentum. We anticipate that the worst of the unemployment rate deterioration is behind us and expect unemployment rates to stabilize around levels just above the non-accelerating inflation rate of unemployment (NAIRU) over the next few quarters. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.the-provinces.scotiabank-s-provincial-outlook--december-17--2024-.html

Report by TD Economics The Canadian 5-year bond yield has declined over 100 bps since early May, while the Bank of Canada has cut its policy rate 3 times (with two more likely on tap this year). In short, the interest rate environment has significantly improved. Housing market activity is stirring, yet Canadian sales gains have, thus far, trailed what could typically be expected given this rush of rate relief. We chalk up the surprisingly subdued performance to two factors. The first is the continued strained affordability backdrop. Despite their recent decline, rates remain at levels last seen about 15 years ago. And, the second factor relates to the transparent messaging from central bankers that interest rates are set to fall even further. This is keeping potential buyers temporarily sidelined as they wait for additional cuts. The flat trend in Canadian average home prices since the summer means they havent really been penalized for that choice. This relative stillness will likely only last so long. Indeed, conditions are in place for a solid pickup in resale activity. Alongside a further steady decline in the BoCs overnight rate, economic growth is likely to regain some traction going forward, and the federal government will roll out meaningful changes to mortgage rules that will support homebuying at the end of the year. Now, first-time homebuyers (and those that purchase new builds) can access 30-year amortizations (instead of 25), thereby lowering their monthly mortgage obligation. Also, the cap on which a buyer can qualify for an insured mortgage has been raised from $1 million to $1.5 million. This means that, for example, a purchaser who buys a detached home in Toronto valued at $1.2 million (the median price in August) could put down about $95k as a downpayment, instead of needing $240k as before. The federal measures should help unlock powerful gains in Canadian sales and average home prices across Canada in the first half of 2025. However, part of this story will be that some activity that wouldve taken place this year is pushed into 2025, as buyers wait for the new rules to commence before purchasing. https://economics.td.com/ca-provincial-housing-outlook